Five of Australia's largest corporations have combined to create a new online procurement buying hub, to be called Cyberlynx.
Commonwealth Bank Group, Woolworths, Lion Nathan, Telecom New Zealand Group (comprised of AAPT and TCNZ Australia) and EDS Australia have signed a heads of agreement to build the hub, which is likely to compete with the likes of corProcure in magnitude.
The newly-formed partnership, Cyberlynx Procurement Services, will be funded by Commonwealth bank (29 per cent), Woolworth's (29 per cent), Lion Nathan (19.4 per cent), Telecom NZ/AAPT (16.1 per cent), and EDS (6.5 per cent), with the possibility that more players will become involved at a later date.
Two out of the five members already use the Ariba Commerce platform, and Ariba Australia/NZ managing director Rob Hirst said he is confident that the other members will be convinced to follow suit. AT Kearney has been contracted to negotiate with suppliers on the members behalf.
The group will spend around $20 million developing the exchange, which is expected to save its participants on costs associated with sourcing various materials from suppliers. The Commonwealth Bank has indicated that it is likely to save around $250 million in its first five years of operation, with all members indicating an average of 7 per cent of total costs will be saved by sourcing supplies through Cyberlynx.
Hirst suggests each member of the exchange will be free to choose their own system integrators for the project, but none of the members have yet indicated which companies they will contract for the job. "Although the obvious choice for EDS would be to use their own people," he said.
Barry Scott has been appointed as acting chief executive officer for Cyberlynx, and expects the exchange to offer opportunities to a wide variety of Australian businesses.
"Its facilities and services will enable Australian businesses to participate in leading edge internet-based procurement with cost and speed-to-market efficiencies," Scott said. "It is proposed to offer cross-market Internet purchasing opportunities."